Invest in Brazil with a Plan

Investing in Brazil isn’t easy. While there are plenty of opportunities for foreign investors to profit, careful planning and structuring of the transaction are crucial to avoid legal and financial troubles. Performing due diligence on potential business partners - whether it’s on the developer of a real estate project or a company in a joint venture - could save you from the unexpected.

Determining the parties to an investment transaction upfront is also critical. Approaching the transaction with the mindset that changes can be made later can lead to complications and unwanted surprises. For example, in real estate transactions, changing the parties after signing a contract can incur additional ITBI transfer tax obligations.

Poor planning regarding the transfer of funds to Brazil can result in delays. Brazilian banks often reject wire transfers either because they lack sufficient supporting documentation or because the bank accounts used for sending and receiving funds don’t match the names of the parties. Therefore, mapping out the flow of funds beforehand is a step that shouldn’t be overlooked.

Furthermore, having clear, well drafted contracts is key. If the investment goes sideways, you’ll want a contract you can fall back on if there’s a dispute. Granted, court cases in Brazil can take years to resolve, but having a written contract will help protect your investment.

Before you invest in Brazil, make a plan. As an international investor, you’ll face specific challenges, such as converting funds into local currency. Getting it right the first time can save you time, money, and a whole lot of aggravation.